Month: September 2008

This week’s Interact 2008 conference — all things interactive media — began upbeat enough, with Ted Leonsis‘s inspirational keynote signaling an ‘anything’s possible, mix-and-mashup’ world of opportunity where entrepreneurs can offer (and perhaps find) fulfillment by providing one of the five keys to self-actualization: relationships, community, self-expression, giving back, or pursuing a higher calling.

But then, the sky began to darken.

With each successive speaker and panel, the mood turned increasingly somber, until by the end of the afternoon — terrabanged by the announcement of the failed bailout and a Dow plummeting 777 points — somber turned to sober . . . and the ad/marketing audience lit out to quench the condition at Happy Hour.

Actually, Leonsis foreshadowed the day’s drama with his own sobering statement: “Today, a marketing person needs to be a mathematician,” and not the English major that he was. Everyone knew exactly what he meant, of course. It’s about metrics, and testing, and deliverables that can be measured — a theme echoed several times during the day. Google VP of Search Product and UX Marissa Mayer talked about nuanced A/B testing, where reducing spacing a single pixel-width — or bathing paid search in a field of yellow rather than blue — resulted in 20% to 40% more click-throughs. Launchbox Digital‘s Sean Greene had asked the panel he was moderating on ‘The Evolution of Advertising Models’ what the near-term effects of the dismal economy would be on ad spending, and the unanimous response was “a shift to what’s measureable” (hopefully, social ads in search of the elusive ‘engage’ metric won’t be left twisting in the wind).

You could almost feel the room heave a collective sigh: “We know, we know — we need to bone up on this technical widgified social media stuff.”

But there was little letup. Avenue A/Razorfish‘s Joe Crump was nearly morose, acknowledging (in a talk aptly titled ‘Digital Darwinism’) that not only is the rate of change of technology overwhelming, but current org charts are woefully ill equipped to deal with it in creative organizations. By early afternoon, Adobe evangelist Duane Nickull and Clearspring CEO Hooman Radfar had applied a thick coat of glaze discussing SOA (tell the truth: did you know that it stands for Service Oriented Architecture?) and widget distribution strategies. Finally, the afternoon wrapped with a panel presenting a glass-half-empty outlook for interactive media employment that could be summed up as a grey-hair lament something like: “We need to hire more whiz kids that understand this stuff . . . but they’re a dickens to manage.”

The great words of someone famous come to mind: Out of adversity comes opportunity (or is it creativity?). Either way, there’s a dislocation, a discontinuity, a gap that begs for a solution. Here, the gap is agencies’ and marketing departments’ inability to keep up with technology of social media. So might be the solution?

Maybe training.

Maybe analytics tools or services.

Maybe app-building for hire.

Now, Crump shouldn’t actually be complaining — of Avenue A/Razorfish’s 500 employees, 200 are technical. But I’m not sure any of the best and the brightest (you know who you are) want to bury themselves in an agency with a salary and long hours.

So what’s the entrepreneurial play here?

Although VCs have historically shied away from service businesses — the multiples were usually far greater in product businesses — that scenario has changed. And in fact, it could solve several problems at once. If you’re dismayed that VCs want you to recite your revenue model (even though, like me, you expect you’ll figure it out once users have embraced you), there could be an alternative to raising money altogether: How about getting paid for what you love to do (and do well)? If in the course of providing your service, you’re also building a product, or developing some intellectual property (IP), then you’re in fact building equity in a service business.

I wrote about BuddyMedia creating ‘branded’ Facebook apps (They actually received funding from Bay Partners and others), and they’re a good example of ‘filling the gap’ for big agencies. But a better example may be Set Consulting. President/founder Jared Goralnick is passionate about productivity, and Set gets paid to improve clients’ productivity. But in the course of doing his work, Goralnick also built a product — AwayFind — aimed at avoiding ’email bankruptcy.’ Voila! . . . a cashflow business, with an equity kicker.

And no VC. Ironically, when you get that combination working for you — and you really don’t need the money — is when the VCs come a-knockin.’

Transparency happens to be the number one search term for this blog. Don’t ask me how it happened. I’ll simply say that I talk about honesty and transparency quite a bit. The reason is that it is the cornerstone for business and brand.

Today at the Interact 2008 conference, AOL founder Ted Leonsis dropped a bomb on a largely communications oriented audience. Having a “special place in my heart” for public relations and marketing, I can tell you that your industry is the one that is most in need of transparency.

Of course, your industry is not the only one needing transparency. Anyone in business needs transparency as it is the cornerstone of trust and brand loyalty. However, public relations more than any other industry in my book needs to be transparent. Transparent with customers. Transparent with the press and bloggers. Transparent with clients.

Ted notes that many of your [Public Relations] clients are asking for handling. What they don’t realize is that the more handling they have, the more they will be rejected.

Pure and simple, handling eliminates flaws. It’s the photoshopped model on the magazine cover. It’s plastic. It’s memorex. And, let’s be honest, consumers see right through it. It’s deceptive and in todays age of user-centric communications, plastic is the downfall of traditional communications. It’s all about transparency.

I like the group at Ars Technica. They do some pretty unique things and have a great mix of content on their site. But when it comes to policy coverage, the blog-like style they use sometimes encourages shortcuts or causes a story to miss big details.

First off, he immediately divides the debate into two sides, a “good versus evil” mentality:

As the filings stream in during the Federal Communications Commission’s proceeding on what to do about embedded advertising, one thing is clear: you are either for a crackdown on the practice or against one. If you are a public health or consumer advocacy group, you belong to the first category. If you speak for the media companies and broadcasters, you are firmly ensconced in the second.

One side sees embedded ads as an intrusive, dishonest, and unhealthy innovation. The other sees product placement as the new foundation of the media’s economic well being. It is really that simple.

I’ve read Mr. Lasar for a long time, but having covered this issue myself, and actually spoken to some of the policymakers and advocates on both sides, I felt his subsequent quotations of written comments without a deeper discussion of the difference between commission authority over broadcasters versus cable content, FCC initiatives to deal with cable pricing and content (so-called a la carte pricing), and the known views of the commissioners themselves left much to be desire, especially when he closed the post like so:

All these commentaries grapple with the complex questions swirling around the product placement regulation issue. Does the FCC have statutory authority to make new rules? Does the First Amendment restrain the agency’s hand? Does the Children’s Television Act already guard children’s TV shows against embedded advertising?

But beyond these concerns, a prominent divide on the issue stands out. Consumer advocates see product placement as a clear and present harm to civil society. Big media sees it as the future.

For one, I believe the job of a reporter or blogger is to attempt to answer the questions. Dig deeper. Find out the why behind the what instead of assuming motives. Most importantly, talk to someone. Both as a solo blogger and during my time at Communications Daily, I always made it a point to talk to sources and experts,not just regurgitate written statements. Granted, I’m in D.C and have been around the industry for a while, but it doesn’t take much effort to get a hold of someone in this town, especially if you’ve been bought by Conde Nast, and your publication has hired a damn fine journalist to run the Ars D.C. operation.

I know FCC issues can be complex, and for an “outsider” they can easily be reduced to black and white. But there is a serious lack of in-depth technology policy coverage on the web, good coverage that exposes the many shades of gray and layers in these issues. There is a real need for it, so If you’re going to do it, do it right. That means more than quoting comments, adding some editorializing and posting it. The job of a good reporter or blogger isn’t just to ask tell your readers what the questions are, it is also to FIND THE ANSWERS, or at least to try, in order to get the truth to those readers. The record in this case is sufficient not only to require background and context, but the issue is important enough that reporting on it should get more than a few cut-and-pastes. Get on the phone and talk to someone who knows more than you do. That’s what I always did, and whenever possible, I still do.

The following is a comment I posted on Ars forums in response to the article. It’s not an attack on anyone, or anyone’s work. What it is (I hope,) is an attempt to fill in the blanks and provide some background as to the questions raised in the article and how some of the issues it raised came to be.

While I appreciate the effort to cover this issue, you’ve missed several important distinctions that significantly impact the debate and readers should consider.

First of all, no one disputes the Commission’s authority over broadcast television, and no one disputes the fact that “embedded advertising” (which is really a fancy word for product placement) must be disclosed. As you already reported, you’ll see the disclosures fly by in ending credits. This is not controversial at all. Rules governing advertising on broadcast television fall under the “public interest” test the FCC must apply to its decision-making process. Product placement has been around for years, but its increasing frequency and the changing advertising market that NAB admits to both demand that the commission re-examine current rules to make sure that broadcasters are satisfying the “public interest” obligation they must meet in order to keep their licenses.

Second, the NPRM would not be making any new rules with respect to children’s programming. What the Commission wants to do is clarify the existing rules to make it clear that embedded advertising is prohibited under the existing ban on advertising inside children’s programming. The requirements of the Children’s Television Act are not in dispute here. The FCC is obligated to make sure their rules carry out the intent of statute, and this means making sure that the rules do not fall out of date with respect to changing technologies.

Whether or not the ban applies to cable programming in addition to broadcast television is part of the larger issue of how far the commission’s authority extends over cable programming. The extent that a channel is a subscription service is an important factor in making this determination (for the same reason that HBO can be racier than TNT). The cable industry could remove any doubt by offering channels a la carte, something NCTA has consistently and strongly opposed, much to the ire of Chairman Martin.

While the FCC has not chosen to heavily regulate cable programming out of (legitimate) First Amendment concerns, a move to further regulate product placement in broadcast television, would surely “trickle down” to the basic cable channels that carry vast amounts of second-run and syndicated broadcast content in addition to original programming.

Where the cable industry in particular has a vested interest in keeping product placement rules the same is they are now in the process of rolling out their new Tru2Way interactive content platform as well as moving to all digital networks. Digital technology will eventually allow much more addressable advertising based on programming choices and other viewing habits in addition to location and time slot. If ordinary product placement must be disclosed more clearly, the industry’s ability to sell ads in interactive programming and games (which could be targeted to children) could be in jeopardy.

The commission has already reached a “broad consensus” on clarifying the existing ban on advertising to children, according to Commissioner Jonathan Adelstein (D). But Chairman Martin has not called for a vote on the issue. Nor has he called for any vote on re-examining rules governing product placement and disclosure.

With respect to the children’s programming ad ban, Commissioner Deborah Tate (R) has been a strong advocate for child safety and protection, but has declined to say publicly whether she supports clarifying the ban on ads in children’s programming. When the House adjourns, her term will expire, leaving an open seat and increasing the likelihood of 2-2 party line votes that would prevent rules from being adopted in absence of a majority.

Framing this debate as “big media versus consumers” oversimplifies what is a combination of far more complex issues that have been out there for years and are an inevitable consequence of the FCC’s legal obligations as well as the constitutional constraints it operates under. And while you’ve based much of the article on the public comments, you don’t include much information on where the Commissioners themselves might stand. Nor do you attempt to provide any background on the subject of FCC’s lack of explicit statutory authority over cable television content (and the a la carte pricing debate that springs from it) or any analysis from industry experts that would allow you to give readers a better view of the issue than just “consumers versus media.”

If you’re in Maryland, as I am, or one of most other states in the Union that are not really in play, then you can keep moving. However, if you are in New Hampshire, Pennsylvania, Virginia, Ohio, Florida, Michigan, Wisconsin, Iowa, Missouri, Colorado, New Mexico or Nevada (states that are swing states according to Politico’s Swing State Map), then there are some dates you need to be aware of going into October. Notably, you need to know when the last day to register to vote (or change your party, if you’re so inclined) or request an absentee ballot.

The blogs and twitters of prominent angels and early-stage VCs around the country point up the contrast between the old-school, opaque nature of entrepreneur-investor relations, and the kind of relationship-building that’s leading to successful fundings with fewer surprises.

I singled out Union Square Ventures‘s Fred Wilson in my last post as the archetype of the new early stage VC. Others are blazing the trails as well.

The old-school meetings with VCs were just that (actually, more like going to the principal’s office.) I remember heading weak-kneed into the Sand Hill Road offices of Institutional Venture Partners, Mohr Davidow Ventures, and others, ushered into a gorgeously appointed conference room (usually by a gorgeously appointed receptionist), setting up, waiting. Neatening up our stacks of business cards. Waiting. Sometimes treated with dignity, other times . . . not so kindly. Sometimes assaulted with questions . . . sometimes no questions. Then, getting neither a yes nor a no, following up with interminable emails to determine interest.

I mean, what was that all about?

Not all meetings went that way. There was an occasional quick ‘no’ which was always appreciated, especially with a reasonable explanation. (Although the old saw goes: “Whatever reason you were given for a ‘pass’ is never the real reason.”)

But the trailblazers are taking a different tack: “Heading to ShakeShack for lunch . . . Line is short,” Wilson twitters. “Going to OpenCoffee Cambridge this morning. Everyone welcome. Join if you can,” tweets a Boston VC. “Talking about database issues.” Could it be we’re headed towards a brave, new world, where lions really do lie down with lambs?

It bespeaks a wholly different process. Instead of ‘buzz’ around a hot new startup with VCs positioning to get in on the deal, there’s a gestation. Foundry Group‘s, Brad Feld, part of the new breed, blogged about the three-year courtship (okay, maybe it’s an elephant’s gestation) that led to his investment in Gnip, a ‘glue’ application that notifies data consumers (plaxo, lijit, etc.) as new data spews from data producers (digg, flickr, etc.), so as to decrease latency. Disclosure: Technosailor Lead Editor Aaron Brazell consults full time with Lijit, an investment company of Foundry Group.

The point is, Foundry forged (sorry) a relationship that eventually found its way to an investment. This is the new process. And it begins with a dialog, rather than a pitch.

Along those lines, I had two-hour discussion (over beers, no less) with a local VC after he gave me a ‘no.’ Will it remain a ‘no’? I believe there’s a chance to convert it . . . but it would only be once I’ve demonstrated sufficient progress with my app and he’s gotten to know me – or more to the point, my capabilities: overcoming obstacles, building my team, winning customers. In other words, once I’ve sufficiently reduced risk (that VC characteristic will never change).

The trend is towards openness and accessibility, and we need it to happen in DC. Like any of these things, OpenCoffee needs a critical mass, starting with a healthy dose of entrepreneurs. Paul Worsham, who (along with Kady) generously organizes the DC Social Media Meetups, was working on pulling together OpenCoffee, as well . . . but our last one was in May, with few attendees. Last night he graciously invited me to take a stab at it.

I’d be happy to do it – but only if I can anchor it with a VC or two in attendance. I’m serious about this. (Lionhearted VCs, consider this an open invitation) shoot me an email at rcapece at technosailor dot com). I will also do a targeted outreach to local VCs, and will report my progress in a subsequent post.

Traveling soon? If you’re a geek, you have certain things that are important to you in an airline. They need to be accessible, approachable. Preferably they have wifi or some kind of gadget-sexiness happening. They engage bloggers and go the extra mile to support the new media ecosystem. They understand the economy of favors and that if folks are taken care of, the airlines themselves will be taken care of.

As a frequent traveler, I know the airlines that match up to my “geek chic” likes. In no particular order…

JetBlue

I don’t get to travel JetBlue all that often because they fly out of Dulles, which is a good hour away with favorable traffic. However, when I flew out of Boston to San Francisco last month, JetBlue was available on Twitter to help me navigate the painful ticket lines and get me to my gate on time. The airline manager at Boston Logan was contacted to ensure I got where I needed to go.

Virgin America

Another airline that, at this time, flies only out of JFK and Dulles on the east coast is Virgin America. I flew Virgin America last year to BlogWorld and they were new – in fact, I covered them briefly before they launched. With in-seat media centers and USB ports at every seat, it was a geek paradise. They were planning internet access at the time, but it was not yet available. I’m not sure if it is now, but I’m due for another flight on VA to see exactly what they are up to these days.

Southwest Airlines

For a discount airline, Southwest may have the best crossover between traditional benefits and new benefits. They highly value online participation by rewarding early check-ins online with better seat opportunities. In addition, they are very active on Twitter and can be found at many new media events. Besides that, they have a hub in Baltimore so they are the locals.

How can you not like an airline that, at Blog World Expo this year, handed me a bunch of peanuts to distribute for free to US Airways flight-mates that have to pay for every stinking thing on the inferior airline?

American Airlines

Less Robust, but still moving in the right direction, is American Airlines who recently announced wifi on their flights. According to Engadget, wifi will run $10-13, but if you want to surf the web on those cross country trips, AA is the airline to do it on.

Air Canada

If you’re in Canada, or plan to fly there, you may want to consider Air Canada. Though not all flights have the in-seat media centers, many of the larger flights do. The Media Center is not quite as good as Virgin Americas in my opinion, but in flight entertainment always is better than talking to a talkative old woman going to see her grandson.

Bonus: United Airlines

United isn’t all that great of an airline, if I’m honest, but they do offer one sexy feature for plane geeks. You can listen to Air traffic control on Channel 9 of all flights. Boring, yet entirely interesting all at one time.

The proposed resolution, offered by Rep. Vern Ehlers, R-Mich., is similar to positions he articulated in a letter earlier this year during a controversy over members’ use of Qik, Youtube and other Web video sites. The Ehlers resolution would have the House adopt rules passed by the Senate Rules Committee earlier this week, allowing senators more discretion in which services they use while maintaining an “advisory” list. “œIt seems that the Senate has come up with a good resolution,” Ehlers said.

Capuano was furious at what he saw at having his proposal called an “attack on free speech” as well as alleged backroom deal-making by Ehlers and others, shouting “œHonestly, if you want to make a deal, pick up the phone or find me on the floor. This is not the cooperative way to do it.”

It appears unlikely that the House will take action before the November elections. “Further review is required,” Capuano said.

Your customer base expects you to do things. They wouldn’t be your customers if not. They expect you to deliver on what you say you can deliver, and they expect you to do it right now. Think about it. You too are a customer and you expect the same thing.

What happens when a company, a campaign, a spouse makes a promise and doesn’t deliver? What happens to the trust? What happens to that relationship?

If Barack Obama promises to ensure that 10% of the nations energy comes from renewable resources by 2012 (he is promising that) and doesn’t deliver, what will voters think of his energy record in 2012 when he is up for re-election?

If Geico promises to save you 15% on car insurance and they end up being more expensive, what happens to their credibility?

If a wife cheats on her husband and he finds out, where will his trust level go?

If an employee is promised a pay increase after 6 months but doesn’t see one until two years, what happens to the credibility of the employer?

Promises delivered create trust which drives sales and delivers brand loyalty. Without that trust, the brand is worthless and the loyalty goes to a competitor. That is never good for business.

I’ve been shooting photography for about 5 months now. I’m not an expert, but I’m learning. I bought a 3 year old Canon Rebel XT on Craigslist from a fine arts student at University of Baltimore. She had taken good care of it and was looking to upgrade to a Canon 5D.

So I bought the camera and started playing around with it. I realized quickly that I had no idea what I was doing. I had no idea what RAW format was, and had no clue about techniques. Shutter was the only thing I understood. Aperture was sort of vague, and ISO I remembered from the good old days of point and shoot film cameras. I didn’t know how it all played together, and I’m honestly still learning. Good photographers never perfect their craft. They just keep tinkering until they know the art enough to make very educated guesses about angles, settings, white balance, etc.

I take my camera everywhere I go now. Out of every 100 photos, I toss 90. I insist on using pure manual settings, because there’s no better way, in my mind, to learn than to trial and error it. When I say manual, I mean manual. I manually focus. I usually keep my ISO around 200, but I can change that. Shutter and aperture settings are all adjusted on every shot.

Recently, I’ve had a number of people mention that they plan to buy their first DSLR camera. Some of these usually follow this up by mentioning really high-end cameras like the Canon 5D or the Nikon D700 as cameras they want.

My response is always the same… Why?

As rookie photographers, they don’t know why. They just know it’s better. Which is true, but that’s not the point.

Here’s what rookie photographers need to focus on when picking up a brand new DSLR camera.

It’s all about technique

During the early part of the camera career, the photographer should be learning about lighting. If you can’t shoot completely manual, you shouldn’t own a high end camera. That’s not to say that owning a high end camera should mean that you can’t use shutter-priority or aperture-priority settings. But, there are principles to shooting and understanding the balance between Aperture and Shutter is critical to taking great photos.

Here’s a primer. Shutter speed is, very simply, how quickly the lens shutter opens and closes. It is measured in “thousandths of a second”. My Canon lists a 1/16 second shutter speed simply as 16. Do the math. The quicker the shutter opens and closes (the higher the number), the less light that can enter the lens. On bright sunny days, you’ll use a high shutter speed. In a dark pub, you;ll use a low shutter speed.

But wait, then there’s aperture. The problem with slow shutter speeds (in a bar, for instance) is that since the shutter is open longer, the camera is more susceptible to camera shake. Long shutter speeds usually need tripods to ensure that no shake appears in the photo. Aperture is defined as “how wide open” the lens is. The higher the aperture number (actually, it’s a lower number as “the aperture is higher”), the more wide open the lens is, allowing for more light. In a dark room, a lower aperture will open the lens up more, to allow more light in allowing a photographer to use a faster shutter.

But then there’s focal length, which affects aperture. Confused yet?

My point is there is technique that needs to be learned and should be learned on a cheaper, lower end camera.

Here’s an example of some photos I’ve taken on my Rebel XT.

Aperture: f/8

Shutter: 1/50 second

ISO: 200

Lens: Canon 50mm Prime (fixed) f/1.8

Aperture: f/5

Shutter: 1/800 second

ISO: 800

Lens: Canon 55-18 Zoom

Admittedly, this was altered because I shot in the RAW, a format that captures all data about a picture allowing for manipulation of the photo qualities after the fact. I used Apple’s Aperture 2.0. The photo was taken in broad daylight.

End of the day, rookie photographers can go and buy top of the line equipment but without a firm understanding of the techniques, it will not help them take great shots.

In Vegas, I went photowalking with about 80 bloggers and photographers. Jared Kohlmann of Pro Photo Rental brought high end gear and allowed me to shoot with a Canon 5D, a 24mm prime f/1.4 and a Fisheye lens. Here are some of the results:

Aperture: f/2.8

Shutter: 1/50 second

ISO: 200

Lens: Canon 15mm f/2.8 Fisheye

Aperture: f/10

Shutter: 7 seconds

ISO: 100

Lens: Canon 24mm prime f/1.4

As a power user, after you’ve learned technique, you’ll definitely want a higher end camera because of the full frame. Lower end cameras, such as my Rebel XT, actually don’t capture all of what the lens can capture and crops the photo. Using lenses like the fisheye actually will not work on crop frame cameras, but you pay top dollar for full frame. As a rookie, these are things you just can’t worry about.

Friday afternoon through Sunday I’ll be at TPRC’s 36th annual conference on Communication, Information and Internet Policy. I hope to be able to provide coverage of the panels and speakers there as well.